NBN | PUNT ROAD END | Richmond Tigers Forum
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NBN

Willo

Tiger Legend
Oct 13, 2007
16,047
2,133
Aldinga Beach
Further to K3's article
A $29 billion blowout in the funding needed to complete the original national broadband network has forced Communications Minister Malcolm Turnbull to abandon election promises, admitting the company would no longer be able to finish the first stage of the network by 2016.

Initial plans to limit network construction costs to government funding may also be threatened, with new funding models put forward by NBN Co looking much like Labor’s current estimates.

In a much anticipated strategic review released publicly for the first time on Thursday, NBN Co said it would cost $33 billion to roll out a mix of technologies, slightly less than the existing $37.4 billion project.

But in a damning assessment of the former NBN Co management and Labor’s policy, the company argued that the current financial estimates were wrong, and that the project would cost $72.9 billion in funding – instead of $44.1 billion - and take three extra years to complete.

The review provided the first full assessment of the state of the massive infrastructure project and recommended steps to complete the project, but revealed for the first time holes in Labor’s broadband policy, and cast doubts over NBN Co’s ability to meet the Coalition’s broadband policy assumptions.

The 134-page document, written by NBN Co’s new management and consulting firms, was critical of its predecessors, saying that, while there were no “material issues” with the company’s financial accounts, the plan relied primarily on “blind faith” and was extremely optimistic.

It said that, whereas the current plan was to spend $37.4 billion in capital expenditure on the project, it would actually cost $55.9 billion. The $44.1 billion in peak funding previously estimated by NBN Co would need to increase to $72.9 billion to finish the project by 2024 due to construction delays and decreased revenues.

Much of it, the assessment suggested, would come from debt funding which it said would be nearly impossible to attain without a government guarantee.

“Based on overseas experience it is possible to radically redesign the NBN Co FTTP deployment to reduce the cost per premises,” the review said.

Consultancy KordaMentha, which conducted an independent assessment of NBN Co’s financials, primarily blamed NBN Co’s management.

It also suggested that the 3000 staff currently tied directly to NBN Co were significantly more than required.

“The Independent Assessment found that NBN Co has attracted a committed, motivated and generally capable group of people who want to do important, meaningful work,” it said.

“It concluded that the culture and leadership of the organisation are widely seen to be a major problem and that the organisation is currently carrying a level of overhead and headcount predicated on the achievement of the corporate plan, which is in excess of current requirements.”

Reviewed outlook

The review, which appeared designed primarily to justify the Coalition government’s preferred technologies, suggested it would switch to a mix of technologies in a bid to complete the network by 2019.

In addition to the existing fibre cabling being directly connected to homes and businesses in some areas, NBN Co would roll out fibre to the node technology, using Telstra’s existing copper network.

It would also retain the cable broadband networks owned and operated by Telstra and Optus, upgrading them to pass 3.4 million homes and attain faster speeds than currently available.

The revised plan would cost $33 billion in capital expenditure, up from the $20.4 billion the Coalition assumed in its April policy, and required peak funding of $41 billion, nearly identical to the $44 billion Labor said it would require for its own project.

The Coalition admitted that its previous goal of providing a minimum 25 megabits per second broadband speeds to all Australians by 2016 would not be achieved.

“We need to start now. There is nothing that can be delivered by 2016 by anybody,” NBN Co executive chairman Ziggy Switkowski said.

The strategic review recommends NBN Co begin immediately to seek new interim arrangements with Telstra on the use of its copper network and prepare for re-negotiations with Optus, Telstra and NBN Co’s construction partners.

NBN Co itself will have to change many of its processes, including operational functions, procurement, delivery and operations, the report says.

The report says a “major transformation” of NBN Co is required to improve coordination between the different segments of the business.

“Clear executive accountabilities are required, combined with a strong transformation infrastructure which actively manages an integrated program of work,” the report reads.

The review said it could optimise the rollout and reduce the cost of rolling out fibre to the home. However, selective redactions from the report meant NBN Co did not release its estimates for a lower-cost fibre rollout.

Mr Turnbull said the government had requested no redactions from the document while Dr Switkowski said it was looking to keep commercially sensitive numbers from public view.



Read more: http://www.smh.com.au/business/malcolm-turnbull-dumps-promises-as-nbn-costs-blow-out-by-29-billion-20131212-2z8ga.html#ixzz2nKajwB7J


$73billion and an extra 3 years to build. No wonder there were no progress updates
 

Willo

Tiger Legend
Oct 13, 2007
16,047
2,133
Aldinga Beach
MB78 said:
Lamb perhaps you better explain to the Australian public that it will still cost 37 billion. As the ALP are unwilling to give updates on current costs and progress.

willo said:
Will probably be closer to double that.

Cost now to be estimated by NBN Co. at $73 billion and 3 years behind schedule :eek:
Looks like I was on the money (nice change, I know ;D )
 

MB78

I can have my cake and eat it too
Sep 8, 2009
7,518
1,283
willo said:
Cost now to be estimated by NBN Co. at $73 billion and 3 years behind schedule :eek:
Looks like I was on the money (nice change, I know ;D )

. Good call but hardly surprising for me. Stephen Conroy tried to treat the Australian publics as fools. And some on this thread were sucked in.
 

mld

hi
Apr 1, 2006
9,643
1
Melbs
MB78 said:
. Good call but hardly surprising for me. Stephen Conroy tried to treat the Australian publics as fools. And some on this thread were sucked in.

I don't think anyone on this thread was sucked in, it was more simply acceptance of NBN at any cost.
 

MB78

I can have my cake and eat it too
Sep 8, 2009
7,518
1,283
MB78 said:
NBN is the path we need to go as we are too far down the track to do a backflip. All IT experts state that it is the way to go so who am I to argue.

What I would like from the ALP as they are in control of this project is updates on costings and timeframes. The current minister has no respect to us as taxpayers by refusing to address this issue and lying or being incompetent take your pick. We need to take a hard line business approach to this to ensure that this is delivered close to the projected cost and on time.

My position.
 

MB78

I can have my cake and eat it too
Sep 8, 2009
7,518
1,283
lamb22 said:
The NBN is an investment will make money as well as providing NECESSARY INFRASTRUCTURE IF WE ARE TO KEEP UP WITH THE REST OF THE WORLD. Revenue projections are for about $80 billiion alone in the period 2020 - 2030.

We sold Teslstra for $50 billion and the NBN which is Telstra on steroids will be built for $37 billion. NO BRAINER!

Posts like these are what I'm talking about. Sin had a very good post in this topic and got slammed for it.
 

Jason King

Forever the GOAT
Jul 19, 2007
6,063
1,070
Adelaide, South Australia
MB78 said:
My position.

Its just a farcial situation. Its going to cost just as much to fix the FTTN mistake in 10 years time. By that time we will be so far back in terms of network infrastructure it will be a hard sell for any government. There are so many unknowns with the Liberals plan.
 

Brodders17

Tiger Legend
Mar 21, 2008
13,625
3,768
It appears the Libs estimated cost of $90mill for the Labor NBN was a little off.

Coalition lied about true cost of NBN: Jason Clare

Comments by the parliamentary secretary to Communications Minister Malcolm Turnbull prove the Coalition lied about cost blowouts to the national broadband network to win votes, opposition communications spokesman Jason Clare claims.

At the Tech Leaders forum on the Gold Coast on Sunday, federal MP Paul Fletcher admitted the Coalition's claim that Labor's NBN would cost more than $90 billion, not $37.4 billion as tabled by Labor, was wrong.

In a speech that criticised the former government, Mr Fletcher said the NBN strategic review released in December proved the Labor party had mismanaged the rollout and got the cost wrong.

He said the true cost of the original plan had been estimated by the review to be $55.9 billion, nearly $20 billion higher than planned.

When asked if the $90 billion estimate was then a "political figure" floated to win votes, Mr Fletcher admitted that figure was also wrong.

"You're right that the estimate that we had developed in opposition was a little higher again from that number."

Mr Fletcher went on to say "the work we did in opposition stands up as a very rigorous piece of analysis and ... we said we'd conduct the strategic review when in government and publish that".

Mr Clare told Fairfax Media that Mr Fletcher's admission proved the Coalition had lied.

"They just lied. They made that figure up.

"They had a strategy at the last election which was to neutralise the issue. Seventy-eight per cent of Australians support the real NBN, so it is very clear they had a strategy to neutralise the issues, same as with education funding. They had a strategy to neutralise it, promise something before the election, then break the promise."

Mr Turnbull's office maintains the $90 billion figure was closer to the final total peak funding estimated by the strategic review of $72.6 billion than Labor's figures.

Mr Clare said the Coalition had broken a number of promises, including that nearly 9 million homes would have a fibre to the node NBN, when now it appeared only 30 per cent would, with a large part connected via existing pay TV cables.

"I've made the point before. We were flogged at the last election, but it wasn't because of the [NBN]. People voted for the Liberal Party in spite of their policy on the NBN."

http://www.watoday.com.au/it-pro/government-it/coalition-lied-about-true-cost-of-nbn-jason-clare-20140218-hvcvh.html

"You're right that the estimate that we had developed in opposition was a little higher again from that number."- i did like that line from the Lib MP, cos $90m is just 'a little higher' that $55m
 

TIGEREXTRA

Tiger Legend
Jun 20, 2004
5,756
0
Melbourne
I have the NBN.

It's good to have up to 100 Mbps but it's not all that important imo.

It's blooming expensive which is what drive's me crazy.
 

RemoteTiger

Woof!
Jul 29, 2004
4,640
83
TIGEREXTRA said:
I have the NBN.

It's good to have up to 100 Mbps but it's not all that important imo.

It's blooming expensive which is what drive's me crazy.

Tigerextra - I sell the NBN and its plans are the same or very similar cost as ADSL plans. Whom did you get your connection from and take it to the Telecommunications Ombudsman if you are dissatisfied.
 

uhuh uhuh

Ruthless and Relentless
Mar 24, 2006
2,994
0
Melbourne
RemoteTiger said:
Tigerextra - I sell the NBN and its plans are the same or very similar cost as ADSL plans. Whom did you get your connection from and take it to the Telecommunications Ombudsman if you are dissatisfied.
I liive in an NBN connected are - what do you charge for 250/250 per month RT?
 

K3

Tiger Champion
Oct 9, 2006
4,635
346
So now the Govt is going to blow our cash on *buying back* the copper network from Telstra. So now we get such comments as "a great step forward" and then there is “This should be seen as a win-win: a win for the taxpayer, a win for the consumers, a win for National Broadband Network and for Telstra shareholders ... and the project will be completed much sooner and at much less cost.” and “The majority of homes across the country will no longer need to have their gardens dug up, their driveways broken apart or equipment mounted on their homes,” Morrow said.

So now the Govt will be liable for the maintenance, and then managing the replacing, of the copper network around the country; wasn't this the 'avoid' reason Howard sold it off to Telstra in the first place?

Good to see there is no political spin from anyone on this decision which is going to leave Australia a good decade behind countries eschewing a progressive, forward-thinking plan for internet accessibility and speed.

For a read you can check out - http://www.theguardian.com/technology/2014/dec/14/coalition-strikes-deal-with-telstra-and-optus-over-copper-wires-for-nbn?CMP=soc_567

I still give the Lib's a big thumbs down on this.
 

KnightersRevenge

Baby Knighters is on board.
Aug 21, 2007
6,527
695
Ireland
Money well spent, I say:

1.jpg
 

mld

hi
Apr 1, 2006
9,643
1
Melbs
K3 said:
So now the Govt is going to blow our cash on *buying back* the copper network from Telstra. So now we get such comments as "a great step forward" and then there is “This should be seen as a win-win: a win for the taxpayer, a win for the consumers, a win for National Broadband Network and for Telstra shareholders ... and the project will be completed much sooner and at much less cost.” and “The majority of homes across the country will no longer need to have their gardens dug up, their driveways broken apart or equipment mounted on their homes,” Morrow said.

So now the Govt will be liable for the maintenance, and then managing the replacing, of the copper network around the country; wasn't this the 'avoid' reason Howard sold it off to Telstra in the first place?

Good to see there is no political spin from anyone on this decision which is going to leave Australia a good decade behind countries eschewing a progressive, forward-thinking plan for internet accessibility and speed.

For a read you can check out - http://www.theguardian.com/technology/2014/dec/14/coalition-strikes-deal-with-telstra-and-optus-over-copper-wires-for-nbn?CMP=soc_567

I still give the Lib's a big thumbs down on this.

I'm not sold on the Lib's approach over Labor's, but it is a good example of why government shouldn't be getting into the business in the first place.
 

tigersnake

Tear 'em apart
Sep 10, 2003
19,745
2,997
Update on the NBN. The party of saying no, looking backwards and thinking small strike again.

http://www.brisbanetimes.com.au/it-pro/government-it/the-nbn-why-its-slow-expensive-and-obsolete-20150908-gji0pr.html
 

Baloo

Delisted Free Agent
Nov 8, 2005
40,883
12,274
Yeah, even Malcolm In The Middle knew it was a bad idea but had to tow the party line.